The seed of innovation is human creativity which provides the capability to introduce new concepts and ideas; but the worth of it all depends on its applicability and scalability, without which it will remain a mere idea or concept.
As humans progress and evolve, innovation and invention by them lead businesses to advance and match pace with human life.
Innovation is the basic foundation on which depends the sustenance and growth of economic prosperity. It ushers in the implementation of novel ideas, up-gradation of services and manufacturing new products. These work as catalytic agents that assist in the adaptation to market and growth of the business.
Progression in any aspect of the business has to be gradual( which means adopting and adapting to new technovations) so that absolute benefit from them can be drawn. Above and beyond this, the primary aim is to be prepared for future disruptions.
In modern times, technological advancements are taking place at an extremely fast pace and keeping stride with them is of utmost importance but at the same time, not a simple task.
The buzz word dominating the business world these days is ‘automation’; a term that the business stalwarts feel is changing every aspect of business in a huge way.
With so many innovative technologies being available today, it is but natural that all businesses are benefiting from it.
Along with new technovations like Blockchain, Big Data, Internet of Things, Artificial Intelligence (AI), etc. we have RPA that has proved to be highly effective in standardized, rule-based, and repetitive processes.
Defining RPA, Capgemini says, “As a virtual worker, RPA replicates user actions to reduce or eliminate human intervention in mundane, repetitive, and manually intensive processes.”
This is what Deloitte has to say regarding this exponential technology, “RPA is computer-coded software, commonly referred to as BOT, that emulates human actions and is able to drive automation of rule-based processes. It is an ideal automation technique for any process that has a heavy dependence on data entry, data manipulation, triggering responses, and communicating with other digital systems.”
Thus, RPA is a preconfigured software that is designed to reproduce the work that humans do, and therefore, they are called robots, or software robots. A good example of RPA is cloud accounting software.
In simple language, we can say that RPA robots automate human tasks and save valuable time and costs.
All branches of business have adopted modernization through automation, be it production, sales, operations, marketing. Finance and accounting, which is undeniably a basic support column of any business, has been rather a little less receptive to adopting these changes. They have until recently been depending on traditional methods which obviously are extremely time-consuming, tiring, monotonous and error-prone.
But thankfully, many companies and individuals who had adopted automation early drew huge benefits and these positive signs motivated more and more people to adopt automation.
It is quite obvious that the deployment of software like RPA brings in a lot of advantages to any firm or individual in dealing with financial accounting and auditing.
Some of the main benefits drawn by RPA is that it helps:
With so many beneficial factors it is then no wonder that the applicability of RPA like automated cloud accounting software is catching up at a fast pace in financial processes.
In the ever fast pace at which everything is being automated in finance, auditing cannot remain immune.
Auditing, in fact, is in dire need of assistance, because traditional methods of audit have lots of mundane and repetitive tasks like file organization, integration of data from multiple files, audit data preparation, the performance of basic audit tests in Excel, copying and pasting data, etc.
These are no doubt simple, rule-based, manual, repetitive tasks but they eat up a lot of time of personnel dealing with them, resulting in many negative situations for firms.
Let’s evaluate how these conventional ways of auditing impact an entity in an adverse manner:
But now all this can be overcome and turned into a benefit if the companies and their CFOs deploy RPA.
The traditional audit processes can be restructured and simplified to a great deal by using RPA (robotic process automation). Robotic software has the capability to enhance the quality of audit by automating structured audit tasks which are rule-based, repetitive and manual.
By embracing business accounting software, auditors will not only save their valuable time but it will also provide them the opportunity to perform more worthwhile tasks, adding more value to their role.
Leaving behind the mundane and monotonous tasks on RPA, the auditors can repurpose their role, and certainly improve the audit quality.
Till date Audit has, by and large, remained a manual and human-centric process, one in which various audit tools are applied but the benefits of new innovative technologies have not been completely penetrated yet.
In theory, the audit process is one in which there are numerous processes that are interconnected and are supposed to function as a whole. But in reality, it is rather more complicated as all the tasks are done manually, and are not linked to each other. Thus, when it comes to the digitization of auditing this limitation is a big hindrance.
To overcome these deficiencies of audit and in order to exploit the automation to its maximum potential, the traditional audit process needs to be redone in a way that it is able to integrate all components successfully. If this redesigning is accomplished, then almost the entire audit process can be automated with great success.
“Conversely, emerging research in the area of RPA (robotic process automation) for auditing suggests that this technology can achieve near end-to-end process automation while at the same time shifting the responsibilities of auditors towards more value-added tasks,” – Andrea M. Rozario.
The biggest challenge for audit is to sieve manually through the mountain of data in order to:
Robotic automation has already started to contribute in a major way where they have been deployed to analyze the datasets. As it has the capability of performing the tasks completely and that too in a very short period. It also helps to ease the work of auditors manifold. Once the anomalies and outliers are pointed out by RPA then it becomes convenient to examine them further manually.
Highlighting the advantages of RPA in audit, KPMG, a global leader in providing tax and audit services, states “In a service center such as KPMG’s Global Services (KGS), we regularly use RPA in our centralized service centers to validate calculation datasets, enabling our people to focus on collecting and analyzing anomalies.”
The crucial aspect is to find out what and how should a systematic audit approach be designed by auditors in order to make the most of the RPA application. Research and study on this subject have come out with a framework which consists of 7 phases:
Before deploying RPA, it is essential for an entity to know which of the audit process/s should be targeted for automation. A thorough evaluation is necessary as it will be able to add value to the process.
The obvious choice would be those tasks that are repetitive, rule-based and consume a lot of human effort and time.
After identifying the process for automation, the next logical step is to break down the process into narrow categories or small steps.
RPA software works best with programs that have complete and clear instructions about the tasks at hand.
After the audit process is identified and broken in small fragments it becomes easier to identify which procedure/s are best suited for RPA. All the implications related to these need to be studied keeping in mind the ability of RPA software.
Best is to go for modules that have a structured judgment and available in digital format.
The next step would be to ensure that all data that is to be automated, i.e. financial and nonfinancial, should be made available in a machine-readable format.
An important component in being RPA ready is the standardization of data; the absence of this would result in confusion and inaccuracy.
Based on the assessment made, particular tasks should be shortlisted to be automated. The thumb rule is to assess if the tasks automation is feasible economically and also if it would add value or not.
Automatable audit procedures should be selected on a long term basis and value addition.
The next stage in deploying RPA in audits is designing and implementing prototypes and see if the automation is working as expected.
The last and the most crucial step would be to assess if the procedure is ready for implementation or not, based on the feedback. It will also throw light or identify the areas that need improvement.
By adopting automated business accounting software, the main benefit that businesses can draw is that it would provide its auditing personnel the advantage to stay on top of these procedures.
A few hurdles are there, which should not be overlooked while deploying RPA in audit, once they are dealt with, there is no looking back.
This observation by Capgemini carries a lot of meaning for the businesses that are looking forward to introducing robotics, “As an organization that is constantly looking for opportunities to improve its processes, Capgemini understands the speed at which robotic automation can transform a business. However, it also understands that a lack of proper preparation before introducing robotics can lead to a start-and-stop implementation.”
But once, all these are put in proper order then there is no looking back.
As we decode all the pros and cons of RPA in audit it is evidently clear that adopting it at the earliest, and with complete preparedness, will benefit the businesses and individuals.
RPA has the distinction of being different from other automation paradigms.
The biggest draw of RPA can be said to be its cost-effectiveness. If one compares the cost of deploying it in proportion to the returns it gives, then there will be no doubt about its usefulness.
Another key advantage of partnering with RPA is that it is non-invasive that helps in connecting disintegrated activities and various software tools and turns it into a well defined automated process. Thus, without having to remodel their existing IT infrastructure, organizations can easily implement and integrate RPA.
It also has the distinctive advantage of functioning in the same way as we do. If it is programmed to check email, it will first open the internet browser, then move on to filling in an email address, password, etc.
The market leaders dealing in RPA offer software that is extremely user-friendly, thus, the personnel working on it do not need extensive training on programming skills.
RPA also helps Auditors to be more empowered and to be able to concentrate on value-creating work.
With robots performing audit tasks in an error-free way, RPA brings in more reliability, enhances service quality, perfects audit trails and improves security.
The implementation of RPA today is the beginning of preparedness to embrace more tech disruptions in the coming time. In short, RPA can be assumed to be the base of automation in the audit process.
Talking about the importance of applying RPA, Mr Ashwani Kohli, Director, Intelligent Automation, PwC South East Asia Consulting, says, “To improve data standards and quality, RPA is an efficient and affordable digital initiative, which will lay the foundations for more advanced cognitive technologies such as artificial intelligence (AI).”
All tech experts see a bigger role for robotics in accounting and auditing in the coming years as more and more advanced tools will enhance its performance.
Work is in progress to automate audit procedures to an extent that it becomes almost free of human interference. Auditors will then just be in a supervisory role, giving their inputs only in crucial matters that are of higher thinking order.
Businesses need to realize the fact that adapting to the changing environment at the earliest is what they need.
The firms or individuals who are progressive have not only deployed RPA but are already reaping its benefits. Those who are skeptical of its implementation, need to make a call immediately, otherwise, they might miss the next level of automation and innovation.
Financial services firms must wholeheartedly adopt digital transformation and technological innovation as it scales the efficiency of operations to higher levels, streamline their processes, produce a quicker output to finally speed-up their businesses.